Overcoming the biggest candidate shortage in decades

Is your firm struggling to recruit? If the answer is yes, you’re not alone. According to the British Chambers of Commerce, 70% of employers that have tried to hire people this year struggled to do so.[i] It seems there’s a huge shortage of candidates in the permanent job market. Let’s delve into the problem that’s plaguing UK companies – and explore why it might not be such a negative thing after all.

What’s the problem here?

In a nutshell, it’s a staffing squeeze. A big one. A recent study by the Recruitment and Employment Confederation (REC) and KPMG has shown that employers are facing the most severe shortage of candidates since 1997; the pace of recruitment for permanent positions has hit the highest rate since the annual REC survey began 24 years ago. [ii] For context, in 1997 Bill Clinton and Tony Blair were in power. You were either a Blur or Oasis fan (never both). And Mark Zuckerberg hadn’t even started high school.

The REC survey also covers starting salaries, and the news on that front will again make employers sit up and take notice: starting salaries are also rising at the fastest rate on record.

On the plus side, this obviously means companies are feeling increasingly confident and upbeat after an uncertain couple of years, and are keen to dive back into the hiring market. That’s great news. Unfortunately, there just aren’t enough permanent candidates to go around. What started as shortfalls in sectors like construction, manufacturing, hospitality, and transport and logistics is now spreading to pretty much all sectors – including traditionally high-paying sectors like IT and engineering.

What’s causing the squeeze? Brexit and the pandemic are major underlying factors here, particularly the rush to reopen businesses and get the economy back on track – resulting in increased hiring – plus a drop in workers coming in from overseas. Then there’s the fact that more cautious candidates may be reluctant to leave their current role right now.

Turning a problem into an opportunity

It sounds grim, doesn’t it? Just as your business is ready to start growing again, you’re hampered by a major talent shortage. But remember, the main problem is in permanent hiring. Perhaps this provides an opportunity to rethink your talent pool?

After all, the way we work is changing. In particular, the pandemic has massively accelerated the shift to more remote working. According to the World Economic Forum, 84% of employers are planning to quickly digitize working practices and expand remote working.[iii] In fact, as much as 44% of the workforce could move to remote working. Couple this with a strong freelance economy and it’s clear that the global talent pool is undergoing a major shift.

In fact, some experts predict that traditional employment (full-time employees, working in a dedicated office or other place of work) will become far less important as more and more companies shift to hiring people on a contract or project basis.[iv] And a large proportion of those contract and project workers will, in all likelihood, work remotely.

This also ties in with a move among forward-thinking recruitment companies towards project solutions. This employment model allows companies to navigate recruitment spikes and troughs by recruiting talent on a project-by-project basis, as opposed to the traditional permanent hiring model. The recruitment company provides an end-to-end managed (or co-managed) service, harnessing their pool of talent to take the client from initial brief to completion of the project.

 In other words, perhaps the next person you hire could be a contract- or project-based professional…

 Finding the way forward

It’s clear that we need government and sector-wide action to upskill people and plug the skills gap. (This will be especially important as the furlough scheme comes to an end and some people find themselves out of work yet lacking in-demand skills.) And perhaps we need to be dipping into overseas talent pools as well – which is more than possible given the shift towards increased remote working.

For individual employers, the first step forward is to recognise that attracting permanent hires may be difficult for the time being. Only then can you look for solutions – such as hiring contractors to ensure your business-critical projects still get done.

Embracing contract- and project-based hires could be a short-term solution, to see you through the staffing squeeze. Or it could provide a longer-term opportunity to rethink how you harness talent and achieve your organization’s goals. Either way, that dark cloud of staffing shortages has a pretty bright silver lining.

If you’re struggling to close the skills gap, drop Roc Search a line. With our expert recruiters and wide pool of IT, technology and engineering talent, we can help keep your business moving forward – whatever’s happening in the wider job market.

[i] Source: https://www.theguardian.com/business/2021/jul/08/uk-employers-struggle-with-worst-labour-shortage-since-1997

[ii] Source: https://www.reuters.com/world/uk/uk-employers-face-worst-shortage-job-candidates-record-rec-2021-09-09/

[iii] Source: http://www3.weforum.org/docs/WEF_Future_of_Jobs_2020.pdf

[iv] Source: https://www.humancloudbook.com/